Country Governance

Belgium Federal Parliament, Country Governance

The gradual decentralization of the Belgian State since the 1970s has entailed frequent changes to the country’s governance structure, most recently with the Sixth State Reform in 2014. Political competences are now divided - or shared - between the Federal Government and the Regions and Communities. The increasing complexity in the way Belgium is governed is not only difficult to understand for companies wishing to do business here, but it has also created unnecessary administrative burdens and resulted in very high and inefficient public spending.

Manage government spending more efficiently

Belgium has one of the highest rates of government spending in the EU at 52.2% of GDP. While the multiple layers of administration in Belgium add to the costs, other federal states, such as Germany and Switzerland, are nevertheless more efficient. This suggests that there is room for improvement in Belgium. Measures to boost competitiveness can also be seen through the lens of public finances – creating jobs and reducing unemployment decreases social security costs, while increasing economic output and tax revenue.

 

Belgium in the ranks

Cut administrative burdens

Part of the administrative burden on business results from Belgium’s regionalized political structure, which is seen as increasingly complex and inefficient by investors. Regionalization, in its current form, and government inefficiency are often hindering business activity and economic growth. In addition to burdensome procedures, the country’s complex governance structure also produces policy inconsistencies. More regionalization should not equate to more complexity.

AmCham Belgium recommends

To improve business and investment opportunities

  • Manage the country more efficiently
  • Manage government spending more efficiently
  • Cut administrative burdens
Manage the country more efficiently

Manage the country more efficiently

  • Simplify the organization of the state and the decision-making processes by, for example, clearly defining who is responsible for making choices when there is no agreement or when a decision urgently needs to be made.
  • Focus on a coherent and efficient government operating model across all government levels.
  • Stop the fragmentation of competences and bundle these in homogeneous packages at the appropriate government level.
  • Create a sustainable and accurate legal framework and avoid gold-plating. When important issues are being negotiated at the EU or OECD level, refrain from launching national initiatives which could harm Belgium’s competitiveness until there is a broader international agreement.
Manage government spending more efficiently

Manage government spending more efficiently

  • The Government should focus on its core competences and make clear budgetary choices in order to promote economic recovery and growth. “Business as usual” is financially unsustainable.
  • Invest in projects that have a long-term positive impact on the country and society, building on European ambitions (for instance on climate, digitalization, health, etc.). 
  • Increase public revenues by increasing the employment rate (e.g. through activation, reskilling and healthy living).
Cut administrative burdens

Cut administrative burdens

  • Simplify, speed up and digitalize administrative processes (e.g. permits), including judicial procedures, further building on good (and sometimes new) practices from the COVID-19 crisis.
  • Improve the overall framework for companies to inspire initiatives and attract foreign investors. 
  • Address sector-specific complexities (e.g. energy, healthcare, mobility).

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